Ad Groups Bolster Fight for Tax Repeal

Two advertising trade groups last week hired a lobbyist to fight for a repeal of a 3 percent ad tax on creative services, which Connecticut passed Feb. 25 to help fill a nearly $900 million budget deficit.

The American Association of Advertising Agencies and the Association of National Advertisers argue that the tax will further hurt Connecticut’s economy by forcing advertisers to use agencies outside the state. Connecticut Gov. John Rowland estimated the tax will raise $5 million, but according to the 4A’s, the figure is more likely to be $2 million or less.

Under the Connecticut measure, a sales tax will be imposed on or after April 1 on advertising, public relations services and direct mail, including “layout, art direction, graphic design, mechanical preparation or production supervision.”